Although some people criticize large retail chains for paying low wages and destabilizing employee lives with uncertain and 'on-call' schedules, Ruetschlin is part of a growing chorus of observers who say it doesn't have to be that way — that those companies could be managed in ways that are good for employees, customers, and the bottom line.

According to the U.S. Bureau of Labor Statistics, one in eight jobs in America is in retail. The industry has become so large and is growing so fast that it has enormous influence on Americans' standard of living and the nation's economic outlook, Ruetschlin said.

Problem is, the retail industry's current employment policies are bad for America and are required neither by the nature of the business nor the need to make profits, Ruetschlin said. Instead, those policies represent a choice made by top industry executives.

Current policies focus on minimizing short-term costs, "but firms have a choice between a strategy of long-term gains, productivity growth, and profits or a strategy of short-term cost minimization," she said.

Demos urges retail chains that employ more than 1,000 people to raise the minimum wage that they pay to $12.25 an hour, equivalent to $25,000 a year for someone working full time.

The group claims that 1,300 retail companies in the U.S. pass that employment threshold, the largest of which is Wal-Mart Stores with 2.2 million employees. Together, those 1,300 firms employ 42 percent of all retail workers.

A yearly income of $25,000 a year would amount to a 27 percent wage increase for the typical full-time worker in retail. Such an increase would lift 700,000 households out of poverty and another 1.5 million up from near poverty levels, Ruetschlin said.

That wage increase would have a stimulus effect on the economy, too, she said, increasing annual retail sales by at least $4 billion and creating at least 100,000 new jobs.

Who pays?

Ellen Davis, spokesperson for the National Retail Federation, said there is a problem with the Demos proposal: Who will pay for it?

"Retail is an incredibly low profit industry," she said. "It is not as simple as raising wages. The money has to come from somewhere, and where it will come from is consumers. Does the average American family in this economy have the appetite to pay 50 cents more for a gallon of milk and pay more for everything else?" she asked.

Ruetschlin, however, said the money would not have to come from consumers, because the companies can afford it. The cost to all 1,300 large retailers in additional wages, even if they raised the wages of all workers making less than $35,000 a year, would be less than just the 10 largest retailers spent to buy back stock from stockholders in 2011 alone, she said.

And even if retailers decided to pass the cost of wage increases on to customers, consumers would pay an average of only 15 cents more per shopping trip, she said.

Rising productivity, however, could mean that retailers would make back more even without raising prices than the wage increases cost.

Zaynep Ton, visiting assistant professor at MIT's Sloan School of Management, says the idea that low wages and erratic schedules are necessary to deliver low prices is a myth.

Ton, who has studied retail operations for 10 years, points to Quik-Trip, Trader Joe's, and Costco as retail chains that have the lowest prices in their competitive segments, but also invest heavily in their employees and achieve solid financial performance and above average customer service.

They do it, she said, by seeing their workers not just as costs, but as drivers of sales. It pays off: sales per full time equivalent employee at Costco are nearly double of those at Sam's Club.

Those companies "demonstrate that even in the lowest-price segment of retail, bad jobs are not a business necessity but a choice," Ton said.

Ruetschlin said that Demos is not advocating any new government policies or regulation. Instead, they hope that employers with goodwill will look at the information and make a decision that will benefit America and investors over the long run.

But Davis, the industry spokesperson, says employers need to tread carefully. "Retailers need to be incredibly careful and have flexibility so that they aren't forced to close like Borders, Circuit City, and Linen & Things. When those stores closed, it put a lot of people out of work," she said.

Ruetschlin hopes that Wal-Mart, which employs 10 percent of all retail employees, will take note of the Demos study and voluntarily raise wages.

"Wal-Mart has the capacity to reshape the landscape for retail work," she said. So far, it has used its power to depress wages and living standards, she said, paying its associates, on average, 28 percent less than the average earned by employees of all other large retailers.

The idea is that if Wal-Mart, which Ruetschlin calls the elephant in the retail living room, raises the wages of its associates, other retailers will feel pressure to follow suit, and the retail sector is so dominant in the economy, that if retail raises wages, other sectors will feel pressure to do the same. The cascading effects of such wage increases will be to stimulate the economy and create more jobs.

In short, as Wal-Mart associates go, so goes America.

Wal-Mart did not respond to the proposal, but in an e-mail statement, spokesperson Paige Fadden wrote that Wal-Mart employees "enjoy competitive wages."

Action, not studies

Other groups advocating for retail workers are relying on more than studies to get employers to change wage and scheduling practices.

The Retail Action Project (RAP), a New York-based advocacy group, has launched a "sustainable scheduling campaign" to end what the group calls "abusive part-time scheduling practices" and give retail workers "stable, predictable, and livable work hours."

Yana Walton, communications director for RAP, said the organization conceives of the campaign as a multiyear effort to mobilize consumer sentiment to pressure retail corporations to change their scheduling practices. Abercrombie & Fitch is their first target.

RAP also will be lobbying for public policies that require employers to give employees "a just and fair advance notice of work schedule," she said.

And RAP will support union organizing efforts that aim to secure advance notice of work schedules and guarantee minimum hours for part-time employees, she added.

While traditional unions, such as the Retail, Warehouse, Department Store Union, are still active and trying to organize new members, OUR Walmart seeks to improve wages and working conditions without going through the onerous process of seeking a union election and recognition as the workers permanent bargaining agent.

OUR Walmart relies on Section 7 of the National Labor Relations Act, which gives employees the right to organize collectively to improve wages or working conditions. It does not require that they belong to a registered union nor does it require them to seek a long-term, written contract with their employer.

OUR Walmart's "Declaration of Respect" includes calls for a $13 an hour minimum wage; dependable, predictable work schedules; and full-time jobs for associates who want them.

"Retail executives would love to make people full-time, but they feel handcuffed by uncertainty in the economic environment," Davis said. "Retailers can't afford to hire full-time people, because they can't predict what will happen in the economy in the next six months," she said.

So instead, employers are pushing more of the risks that used to be management's responsibility on to their employees, said Susan Lambert, associate professor at the University of Chicago, and rewarding them less.

And that is priming the pump for a classic battle between owners and associates over how to divvy up the risks and rewards of business.